Issue link: http://catalog.e-digitaleditions.com/i/801297
E-1 APPENDIX E — NON-GAAP FINANCIAL MEASURES We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including adjusted net earnings and adjusted net earnings per diluted share. We believe that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes these adjusted measures are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations with corresponding GAAP financial measures below, provide a more complete understanding of our business. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures: 2011 2012 2013 2014 2015 2016 Net Earnings ($ millions) Reported $ 1,345 $ 1,298 $ 1,006 $ 515 $ 1,439 $ 1,647 Acquisition and integration related charges 142 37 72 65 24 100 Amortization of intangible assets — 88 98 133 147 221 Restructuring-related charges 60 59 46 78 97 98 Recall matters — 133 460 628 210 127 Regulatory and legal matters — 33 63 — (46 ) (7) Donations — — 15 — — — Tax matters (99 ) — (46 ) 391 78 8 Adjusted $ 1,448 $ 1,648 $ 1,714 $ 1,810 $ 1,949 $ 2,194 Net Earnings per Diluted Share Reported $ 3.45 $ 3.39 $ 2.63 $ 1.34 $ 3.78 $ 4.35 Acquisition and integration related charges 0.37 0.09 0.19 0.17 0.06 0.26 Amortization of intangible assets — 0.23 0.26 0.35 0.39 0.59 Restructuring-related charges 0.16 0.15 0.12 0.20 0.26 0.26 Recall matters — 0.35 1.20 1.65 0.55 0.34 Regulatory and legal matters — 0.09 0.17 — (0.12 ) (0.02) Donations — — 0.04 — — — Tax matters (0.26 ) — (0.12 ) 1.02 0.20 0.02 Adjusted $ 3.72 $ 4.30 $ 4.49 $ 4.73 $ 5.12 $ 5.80